Rule 9.340, Florida Rules of Appellate Procedure, will be amended to include the underlined text below.

(a) Issuance and Recall of Mandate. Unless otherwise ordered by the court or provided by these rules, the clerk shall issue such mandate or process as may be directed by the court after expiration of 15 days from the date of an order or decision. A copy thereof, or notice of its issuance, shall be served on all parties. The court may direct the clerk to recall the mandate, but not more than 120 days after its issuance.

Rule 2.205(b)(5), will be amended as indicated below (underlined text is new):

(5) Issuance and Recall of Mandate; Recordation and Notification. The clerk shall issue such mandates or process as may be directed by the court. If, within 120 days after a mandate has been issued, the court directs that a mandate be recalled, then the clerk shall recall the mandate. Upon the issuance or recall of any mandate, the clerk shall record the issuance or recall in a book or equivalent electronic record kept for that purpose, in which the date of issuance or date of recall and the manner of transmittal of the process shall be noted. In proceedings in which no mandate is issued, upon final adjudication of the pending cause the clerk shall transmit to the party affected thereby a copy of the court’s order or judgment. The clerk shall notify the attorneys of record of the issuance of any mandate, the recall of any mandate, or the rendition of any final judgment. The clerk shall furnish without charge to all attorneys of record in any cause a copy of any order or written opinion rendered in such action.

Additionally, Rule 2.210(b)(4) will be amended as follows (underlined text is new):

(4) Issuance and Recall of Mandate; Recordation and Notification. The clerk shall issue such mandates or process as may be directed by the court. If, within 120 days after a mandate has been issued, the court directs that a mandate be recalled, then the clerk shall recall the mandate. If the court directs that a mandate record shall be maintained, then upon the issuance or recall of any mandate the clerk shall record the issuance or recall in a book or equivalent electronic record kept for that purpose, in which shall be noted the date of issuance or the date of recall and the manner of transmittal of the process. In proceedings in which no mandate is issued, upon final adjudication of the pending cause the clerk shall transmit to the party affected thereby a copy of the court’s order or judgment. The clerk shall notify the attorneys of record of the issuance of any mandate, the recall of any mandate, or the rendition of any final judgment. The clerk shall furnish without charge to all attorneys of record in any cause a copy of any order or written opinion rendered in such action.

Wednesday, October 30, 2013

In Worthington v. Worthington (2D12-1361), the Second District reversed, in part, an order entered by the trial court because the order granted relief not requested in the motion pending before it and because the party opposing the motion had not received notice that other issues would be considered. The court stated:

Friday, October 25, 2013

In PNC Bank, N.A. v. Neal (1D12-2544), a short opinion from the First District, the court affirmed a dismissal with prejudice entered in a foreclosure action filed by PNC. The court stated that:

We affirm but point out that the dismissal with prejudice of PNC Bank’s foreclosure action against the Neals does not preclude PNC Bank from instituting a new foreclosure action based on a different act or a new date of default not alleged in the dismissed action. See Star Funding Solutions, LLC v. Krondes, 101 So. 3d 403 (Fla. 4th DCA 2012) (citing Singleton v. Greymar Assocs., 882 So. 2d 1004, 1005 (Fla. 2004)).

In Hernandez v. Colonial Grocers, Inc. (2D11-3415), the Second District determined an arbitration provision was invalid because it conflicted with the relief afforded by the relevant federal statute. The plaintiff filed a lawsuit asserting violations of the "Fair Labor Standards Act [29 U.S.C. § 216(b)] and section 440.205, Florida Statutes (2010), of the Florida Workers' Compensation Act.” The trial court granted the defendant's motion to compel arbitration pursuant to a provision of the employment contract. That arbitration clause included the following language: “...Although the parties shall initially bear the cost of arbitration equally, the prevailing party, if any as determined by the arbitrator at the request of the parties which is hereby deemed made, shall be entitled to reimbursement for its share of costs and reasonable attorneys' fees, as well as interest at the statutory rate.”

The court stated that "Hernandez also argues on appeal that the instant arbitration agreement is unenforceable because it includes a prevailing party attorney's fee provision that contradicts the attorney's fee provision of the statute under which he brought suit.” As to that second issue, Flyer Printing did require reversal.

Here, Hernandez brought suit under the federal Fair Labor Standards Act and the Florida Workers' Compensation Law. The federal act states that a prevailing plaintiff is entitled to an award of reasonable attorney's fees, but it does not allow for prevailing party fees for the defendant. 29 U.S.C. § 216(b). The instant arbitration agreement, however, states that whichever party prevails "shall be entitled to reimbursement for its share of costs and reasonable attorneys' fees." Accordingly, should the arbitrator declare Colonial the prevailing party, Hernandez would be obligated under the arbitration agreement to pay Colonial's attorney's fees. This renders the potential cost of arbitration to be far greater to Hernandez than the potential cost of civil litigation, which under no circumstances would include Colonial's attorney’s fees. As such, while the parties' agreement may not contravene any of Hernandez’s rights under the federal act, it does expose him to a potential liability to which he would not be exposed if the litigation occurred in civil court because the federal statute specifically protects him from such liability.

"This is a sufficient enough chilling effect to defeat the remedial purpose of the federal act. The attorney's fees provision of the Fair Labor Standards Act is intended to encourage employees to seek redress when they believe they have been wronged by an employer. The arbitration agreement, however, does just the opposite— it discourages the employee from pursuing a claim. As such, under Flying Printing, it is unenforceable."

In American Home Mortgage Servicing, Inc. v. Bednarek (2D12-2099), the Second District reversed the trial court’s order dismissing a complaint for lack of standing. The court described the facts, and chain of ownership of the note and mortgage in question, as follows:

On May 31, 2005, Ms. Bednarek executed a note and mortgage in favor of American Brokers Conduit for the purchase of real property. Thereafter, the loan was sold to Deutsche Bank. On March 30, 2006, American Brokers Conduit assigned the mortgage to the bank's servicing agent, AHMSI-Maryland. In September 2007, AHMSIMaryland filed a complaint for foreclosure alleging it was the owner and holder of the underlying promissory note. With the complaint and the amended complaint, AHMSIMaryland filed copies of the mortgage, the promissory note showing a blank endorsement, and the 2006 assignment of mortgage. In April 2008, AHMSI purchased AHMSI-Maryland, acquiring the company's servicing rights. In 2009, AHMSI filed the original note and mortgage with the trial court.

At the close of testimony in the non-jury trial, counsel for Ms. Bednarek moved for an involuntary dismissal and argued that the plaintiff had failed to establish standing. "Relying on McLean [v. JP Morgan Chase Bank National Ass'n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012)], the trial court granted the motion on the ground AHMSI had failed to prove it was the owner and holder of the note and mortgage.”

The court stated that “a party seeking foreclosure must establish that it had standing to foreclose at the time it filed the complaint. A foreclosure plaintiff has standing if it owns and holds the note at the time suit is filed. A plaintiff may also establish standing to foreclose by submitting evidence of a special endorsement on the note in favor of the plaintiff or a blank endorsement, an assignment from the payee to the plaintiff, or an affidavit of ownership.” Citations removed. Based upon that law, the court held:

Here, both the complaint and the amended complaint reflect that AHMSIMaryland, the original plaintiff, was the owner and holder of the note at the time the complaint was filed. An assignment of mortgage was attached to the complaint which provided that the original lender, American Brokers Conduit, assigned the mortgage to AHMSI-Maryland on March 30, 2006, more than one year prior to the filing of the original complaint. Also attached to the complaint and amended complaint was a copy of the note showing a blank endorsement. Because AHMSI possessed the original note, endorsed in blank, it was the lawful holder of the note entitled to enforce its terms.

Thursday, October 17, 2013

In In re Grand Jury Subpoena, the Fourth Circuit reviewed an order from the district court “that: (1) certain emails sent by a government-employed lawyer were not protected by the attorney-client privilege, and (2) the attorney-client privilege does not exist between a government official and a government-employed lawyer in the context of a criminal investigation.”

The Fourth Circuit first held that the unidentified appellants failed to establish the government attorney was actually providing legal advice to the government employee in the emails at issue. Therefore, the emails were not privileged and that portion of the district court’s order was affirmed.

The Fourth Circuit vacated the second portion of the district court’s order as moot (for now). Having already resolved the privilege issue as to the specific emails presented, the court held resolution of the broader second issue did not present a justiciable issue. Therefore, any decision would be an improper advisory opinion.

The court did note that the broader and more interesting issue may be ripe for resolution in the future (“We note, however, that should the record be more fully developed through the course of the grand jury investigation such that a concrete dispute arises as to particular communications, justiciable claims may yet lie.”).

For what it’s worth, as discussed in a story by Politico, the Associated Press has identified the “confidential” government employee as the Governor of Virginia.

Friday, October 11, 2013

In Universal Checks & Forms, Inc., et al. v. Pencor, Inc. (5D12-3593), the Fifth District Court of Appeal reversed the trial court's judgment of dismissal based upon ERISA preemption. The court stated that "Universal filed a complaint for breach of fiduciary duty and negligence in connection with Pencor’s recommendation and sale to Universal of a defined benefit plan. According to the complaint, Pencor failed to disclose a critical feature of the defined benefit plan, namely, the impact of the age of employees on those employees’ share of the plan…It is Universal’s position that Pencor recommended a defined benefit plan that was unsuitable for Universal. The complaint requested compensatory damages of no less than $80,000, disgorgement of commissions, prejudgment interest, costs, and fees." "Pencor moved to dismiss the complaint on the basis that the claims were preempted by ERISA. The motion was granted and the trial court entered a final judgment of dismissal."

"Initially, the Supreme Court gave a broad dictionary interpretation to the 'relate to' preemption language, stating that a law 'relates to' an employee benefit plan 'if it has a connection with or reference to such a plan.' Shaw, 463 U.S. at 96-97. However, the Shaw court also recognized that some state actions may affect employee benefit plans 'in too tenuous, remote, or peripheral a manner to warrant a finding that the law ‘relates to’ the plan.' Id. at 100 n.21."

The court concluded:

In the instant case, we do not believe that permitting Universal to proceed with its action against Pencor would, in any way, interfere with Congress’s intent to ensure that plans and plan sponsors are subject to a uniform body of benefits law. Universal is not asserting wrongdoing in the administration of the employee benefit plan, nor is it challenging the terms and conditions of the plan as created. Rather, Universal is alleging that Pencor engaged in tortious conduct by recommending that Universal create an employee benefit plan as a retirement investment vehicle and tax shelter. The recommendation, and the tortious conduct allegedly associated with it, necessarily occurred before the plan was even formed.

In Wells Fargo Bank v. Morcom (5D11-4089), the Fifth District reversed a trial court's judgment in favor of the borrower. In the case:

Appellant filed a complaint on August 6, 2010, seeking to foreclose a mortgage issued by Appellees. Appellant alleged, inter alia, that “Mortgagee shown on the Mortgage attached as an exhibit is the original Mortgagee” and “Plaintiff is now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes § 673.3011.” Appellant attached to the complaint copies of the mortgage and the promissory note.1 The note is endorsed “pay to the order of ________ without recourse,” with the blank space populated with a stamp of Wells Fargo Bank, N.A.

The trial court held that the borrowers were entitled to judgment in their favor because the bank did not prove that it owned and held the note. The Fifth District, however, concluded that you do not need to prove both ownership and that you hold the note. The court stated:

The Florida UCC and recent cases from this court stand for the proposition that a plaintiff has standing to bring a foreclosure action if the plaintiff is the holder of a promissory note, endorsed in blank, secured by a mortgage….We have previously held that “[t]he party that holds the note and mortgage in question has standing to bring and maintain a foreclosure action.” Deutsche Bank Nat’l. Trust Co. v. Lippi, 78 So. 3d 81, 84 (Fla. 5th DCA 2012) ….“[T]he person having standing to foreclose a note secured by a mortgage may be either the holder of the note or a nonholder in possession of the note who has the rights of a holder.”….In Lippi, Deutsche Bank’s second amended complaint contained the language that it “is now the holder of the Mortgage Note and Mortgage and/or is entitled to enforce the Mortgage Note and Mortgage.” Lippi, 78 So. 3d at 84. The facts in Lippi are almost identical to Appellant’s complaint in the present case, which provides that the “Mortgagee shown on the Mortgage attached as an exhibit is the original Mortgagee” and “Plaintiff is now entitled to enforce Mortgage and Mortgage Note pursuant to Florida Statutes § 673.3011.” The Lippi court held, where the note was endorsed in blank, meaning it was “payable to the bearer and could be transferred simply by possession,” Deutsche Bank’s standing was established because it was the note holder, regardless of any recorded assignments.

In the present case, the original note Appellant attached was endorsed in blank with Appellant’s name stamped in the blank endorsement field, which, paired with section 673.3011(1), established that Appellant was the holder entitled to enforce the instrument….

Applying portions of the Florida UCC, other district courts of appeal have determined that a party that holds a note endorsed in blank has standing to foreclose a mortgage.

Based upon the fact that the bank was holding the note, which was endorsed in blank, the bank had standing to foreclosure and was entitled to judgment in its favor.

In Focht v. Wells Fargo Bank, N.A. (2D11-4511 & 2D11-4980), which was released a few weeks ago, the Second District certified the following question to the Florida Supreme Court as one of great public importance:

CAN A PLAINTIFF IN A FORECLOSURE ACTION CURE THE INABILITY TO PROVE STANDING AT THE INCEPTION OF SUIT BY PROOF THAT THE PLAINTIFF HAS SINCE ACQUIRED STANDING?

In the opinion, written by Judge Silberman, the Court "reverse[d] the final judgment of foreclosure because a genuine issue of material fact exists regarding Well's Fagro's standing to enforce the note and mortgage."

At a summary judgment hearing, "Wells Fargo asserted that it had standing by virtue of an assignment of the note and mortgage dated September 2008, which was several months after the complaint was filed. Wells Fargo alternatively asserted that it had standing as the holder of the original note endorsed in blank. In opposition to Focht's cross-motion for summary judgment, counsel for Wells Fargo addressed Focht's affirmative defenses and argued that each was either factually or legally insufficient."

The court concluded that "A plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special endorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff's status as the holder of the note….But standing must be established as of the time of filing the foreclosure complaint….Thus, Wells Fargo's submission of a postfiling assignment of the note and mortgage does not establish that it had standing when it filed the lawsuit."

In this case, "Wells Fargo alternatively argues that it established standing by submitting the original note endorsed in blank….As with the assignment, however, Wells Fargo did not submit the original note until several months after it had filed the complaint. To establish standing as the holder of a note endorsed in blank, a party must be in possession of the original note…..Thus, Wells Fargo was required to submit evidence that it was in possession of the original note with the blank endorsement at the time it filed the complaint to establish standing."

In this case, the blank endorsement, which is apparently located on the back of the note, did not get copied for the record….Although Wells Fargo alleged in its unsworn complaint that it was the owner and holder of the note and mortgage, it asserted that the original note had been lost or destroyed and 'is not now in the custody and control of [Wells Fargo].' Notably, the affidavit of indebtedness filed in support of summary judgment relies on the postfiling assignment for standing." Therefore, the judgment was reversed.

The court "also certif[ied] a question based on some of the same concerns articulated by Judge Altenbernd in his concurrence." The court stated:

For our part, appellate courts have seen a recent influx of appeals in which defendants have successfully argued that the trial court erred in entering a foreclosure judgment in favor of the plaintiff because the plaintiff failed to establish standing at the time of filing. ...In many of these cases, the plaintiff presented unrefuted proof of standing acquired after filing but prior to the final hearing. … The appellate courts are nonetheless compelled to reverse based on the district courts' application of a long line of supreme court cases applying the general principle that "the plaintiff's lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is filed."…

We note that the supreme court has not applied this standing principle inthe exact context presented in this case. And we question whether, in light of the ongoing foreclosure crisis in this State, the supreme court would adhere to this principle in cases in which a plaintiff has acquired standing by the time judgment is entered. Accordingly, we certify the following question as one of great public importance:

CAN A PLAINTIFF IN A FORECLOSURE ACTION CURE THE INABILITY TO PROVE STANDING AT THE INCEPTION OF SUIT BY PROOF THAT THE PLAINTIFF HAS SINCE ACQUIRED STANDING?

Judge Altenbernd wrote a concurring opinion that began:

I concur in this decision because existing precedent requires me to do so. A requirement that the plaintiff prove that it owned or possessed a promissory note at the commencement of a foreclosure action may have made sense during earlier periods of economic downturn,3 but in this era of securitization of mortgage debt and computerized banking, it has proven to be a restriction that often provides a windfall to a borrower who can prove no harm by the fact that the plaintiff obtains possession of the note after the filing of the lawsuit but before the entry of judgment. So long as there is no dispute that the borrower received the money and defaulted on the note, the law should not use "standing" to require the dismissal of a lawsuit. If the defendant raises this issue at the inception of the lawsuit this affirmative defense may warrant a delay in the proceedings while the plaintiff establishes that it can enforce the note. But especially when the original note in default has already been filed in the court record, the law should generally permit a plaintiff to obtain a judgment of foreclosure if the plaintiff establishes that it has a right to enforce the note at the time it seeks to obtain a final judgment….

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